Arya News - Rising employment, particularly among rural women, and expanded social transfers contributed to India’s poverty reduction. The World Bank expects further gains by 2028, but warns that vulnerable households still face unequal earnings and limited job security.
NEW DELHI – India’s poverty rate fell from 57.7 per cent to 16.1 per cent between 2011 and 2023, with an estimated 49.6 crore people moving above the lower-middle-income poverty threshold, according to the World Bank’s October 2026 Poverty and Equity Brief.
The findings place India among countries recording the fastest declines in poverty globally. However, the report also draws attention to persistent wage inequalities and the growing concentration of poverty among households with limited access to stable employment.
Finance Minister Nirmala Sitharaman welcomed the findings on Friday, describing them as evidence of the government’s efforts to improve household welfare and expand economic opportunities.
How much has poverty fallen in India?
The World Bank estimates that the proportion of Indians living on less than $4.20 a day, measured using 2021 purchasing power parity (PPP), declined by 41.6 percentage points over the 12-year period.
Extreme poverty, measured against the lower threshold of $3 a day, also fell substantially, from 27.1 per cent in 2011 to 2.6 per cent in 2023.
The two thresholds measure different levels of economic deprivation. They are internationally comparable benchmarks adjusted for purchasing power, rather than direct conversions into rupees at current market exchange rates.
The lower-middle-income threshold captures a broader section of economically vulnerable households than the extreme poverty measure.
The World Bank attributed the decline to higher household consumption, expanding employment opportunities and social transfers, including food subsidies.
Why did rural India make faster progress?
The report found improvements in household welfare across rural and urban India, with faster gains in rural areas helping narrow the divide.
Employment was a major contributing factor.
India added approximately 13.4 crore employed people between 2017 and 2023, nearly twice the increase in its working-age population over that period.
Rural women accounted for a substantial portion of the employment growth, with more women entering paid work and contributing to household earnings.
Access to electricity also improved, reaching 99 per cent of the population, according to survey data for 2022.
These developments helped increase household resources and improve living conditions, although the gains were not evenly distributed.
Why does wage inequality remain a concern?
Despite the reduction in poverty, the World Bank identified persistent differences in workers’ earnings.
In 2023, median earnings among the highest-earning 10 per cent of workers were approximately 13 times those of the lowest-earning 10 per cent.
Poverty has also become increasingly concentrated among households with fewer assets, lower educational attainment, high dependency ratios and limited access to secure jobs.
The distinction matters because moving above an international poverty threshold does not necessarily provide long-term financial security.
A household may no longer fall below the measured poverty line but can remain vulnerable to income disruptions, illness, unemployment or unexpected expenses.
The findings suggest that sustaining poverty reduction will require attention not only to employment numbers but also to job productivity, earnings and income stability.
Sitharaman credits govt policies for poverty decline
Highlighting the report on X, Sitharaman credited the government led by Prime Minister Narendra Modi with creating conditions for more inclusive growth.
She argued that the findings reflected the effectiveness of sustained policy interventions and helped explain public support for the ruling National Democratic Alliance (NDA).
The Finance Minister said the government would continue focusing on productive employment, stronger household incomes and improved public services.
Will India’s poverty rate fall further by 2028?
The World Bank expects poverty reduction to continue, although at a slower pace.
Its projections indicate that the share of people living below the $4.20-a-day threshold could fall from an estimated 14.2 per cent in 2026 to 12.1 per cent by 2028.
These figures are projections based on economic and labour-market assumptions, not observed poverty measurements for those years.
They could change as updated employment, household consumption and macroeconomic data become available.
The longer-term test will be whether India’s employment expansion translates into more productive and better-paying work, particularly for households that have only recently moved above poverty thresholds.